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No Virginia, There Is No Sanity Clause In Obama Drilling Permit Policy

Northstar Island, an artificial island in the Beaufort Sea north of Alaska, is a site of oil and gas drilling. (Photo credit: Wikipedia)

It seems the Commonwealth of Virginia won’t be receiving “all of the above” energy opportunities they requested from Obama’s permitting elves any time soon. Instead, they will just have to settle for more windy promises.

Last November, despite strong state bi-partisan and public support, the Obama administration unexpectedly dropped Virginia from the government’s most recent leasing plan altogether, declaring a seven-year delay with little explanation. Then, only three months later, the president announced federal approval of leasing plans for a wind farm off the Virginia coast. He apparently didn’t need to offer much reason for that.

In 2008, President George W. Bush and Congress lifted a decades-long ban which opened the entire Pacific and Atlantic coasts to offshore drilling, allowing a scheduled 2011 Virginia lease sale to move forward. Soon afterwards, the new Obama administration delayed that lease sale until 2012, later announcing that no areas off the Atlantic Coast would be available for energy development in their next five-year plan (2012-2017). Interior Secretary Ken Salazar explained the reason, stating; “Making decisions based on sound science, public input and best information available is a critical component of the administration’s all-of-the-above energy strategy.” Interior then set in motion a five-year environmental and seismic study of offshore areas, including off the Virginia coast.

Virginia isn’t the only Gulf state to be feeling the drilling denial doldrums. The Outer Continental Shelf Governors Coalition of seven coastal states, including Texas and Alaska, sent a letter to the president in April emphasizing the importance of increasing the speed and predictability of permitting and expanding access to new reserves…actions that he could initiate immediately.

The Energy Information Administration (EIA) projects that Alaskan offshore development permitting delays will cause production to decrease by more than 200,000 barrels per day this year compared with before President Obama took office. According to the energy research firm HIS-CERA, this will cost between 110,000 and 230,000 lost job opportunities across multiple sectors.

Yielding to challenges and legal actions,theEPA withheld permits to Shell Oil last year that prevented them from drilling in the Arctic Ocean off the northern coast of Alaska. This occurred after the company has already spent five years and nearly $4 billion on those plans. The Beaufort and Chukchi Sea leases alone cost $2.2 billion. That project would have generated an estimated 55,000 jobs per year for 50 years, along with $145 billion in new payroll and $193 billion in government revenues over that period.

And the reason for blocking it? EPA’s appeals board ruled that Shell hadn’t included carbon emissions from an ice-breaking vessel in the project’s overall greenhouse gas calculations. Yet the board didn’t seem to find much of a problem regarding emissions from those tankers that will deliver oil from Venezuela to help make up a shortfall…or from ships carrying crude from Brazil that the president promised we will purchase as their best customer…after lending them $2 billion to drill for it in the Gulf of Mexico.

This is the same President Obama who claimed credit during his January 24 State of the Union address for highest levels of natural gas production in more than 30 years, record oil production in eight years, reduction of oil imports by an average of 1.1 million barrels per day, and making the U.S. a net energy exporter. To hear him tell it, these achievements are appropriately attributable to his foresight and actions, rather than to an entrepreneurial energy industry. Speaking at a January 17 meeting of his Jobs and Competitive Council he complained about lack of recognition of this fact, stating, “Folks are acting as if that [natural gas boon] just sprung out of thin air and is one more example of the dynamism of the marketplace.”

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